26 September 2023

Finance watchdog finds disputes up

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The Australian Financial Complaints Authority (AFCA) which deals with disputes involving banks, insurers, super funds, investment firms and financial advisers received over 72,000 complaints in the past 12 months, an increase of three per cent over the financial year before.

The total was released by AFCA’s Chief Ombudsman, David Locke who revealed that natural disasters like floods with 1,586 complaints last year were more than double the 653 complaints from disasters the year before and that the top four Australian banks together accounted for nearly 20,000 complaints, a rise of nearly 10 per cent.

The top four insurers also attracted complaints accounting for about 9,400 complaints, up 19 per cent with the overall number of licensed financial firms receiving complaints against them five per cent lower than in the previous year.

“We acknowledge that insurers face challenges as they try to manage claims and get people back on their feet,” Mr Locke said.

“We know there are significant issues with the supply of things like building materials, parts and labour because of national and global events outside their control,” he said.

“Notwithstanding this, we are concerned at the rise in complaints being escalated to AFCA.”

He said the Authority wanted to understand the causes of complaints better and was eager to work with insurers to help them resolve disputes more quickly and ultimately prevent them.

Mr Locke said he was pleased to see that, overall, half of the complaints that reached AFCA were resolved quickly at the earliest stage of its process.

He said that altogether, 67 per cent of complaints were resolved by agreement between the parties.

“Overall, in 2021-22, successful complainants secured more than $200 million in compensation and refunds,” he said.

“In addition, AFCA’s investigations into a range of systemic issues resulted in remediation payments to consumers totalling more than $18 million.”

Mr Locke said AFCA had now helped to secure more than $820 million in compensation and refunds since starting operation on 1 November 2018 and it had registered more than 270,000 complaints in that time.

“For more detail on these and other complaints, along with a State-by-State breakdown, please visit our Data Snapshot” he said.

The snapshot can be accessed on the AFCA website at this PS News link.

Mr Locke said AFCA would publish its comprehensive Annual Review later this year.

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